Day trading the SP 500 e-mini

Outlook for the week of Jan. 29 – ESH7

1. Friday prices 

Friday Naturus made 7 scalping calls for a net gain of 16.75 points. Explanation here.

2. Major support and resistance for Monday Jan. 29

3. Weekly outlook

S&P 500 cash closed at 1422.2 Friday, a loss of 8.3 points for the week. The e-mini contract (ESH7) lost 9.25 points. So far the ES is still consolidating near the top of its daily range.  The short-term support line that has formed since Nov. 2006 (black in the chart below) has now prevented the price from falling three times. Friday the ES closed right on this support line, but with less strength, an indication that the major trend is preparing to change. The change is not yet confirmed but the Bull is definitely weakening.

This week the major support range around 1414.00-1412.00 may be challenged. If the ES breaks major support at this level and closes below it once or twice, bearish momentum may take the market down to the next major support around 1390.

But in the early days of week, we may see the price bounce up a little for end-of-the-month window dressing. If this bounce does not close above 1438-39 range for the month, the odds still favor a downside move. The weekly resistance level is 1440 and support level is 1390.

4. Daily outlook for Monday.

Friday the ES tested its 40 day moving average and bounced up for closing.  The Rectangle pattern at the top, a distribution pattern, brought aggressive bears into the market.  Today 1417-16 is the key level for ES. The price needs to hold this level to initiate an up move to test last week’s breakdown levels around 1432.50-1435.00. Failure to hold this level will create more bearish momentum.  Daily indicators are bearish. Any bounce will attract Bears to step into the market.

5. Trading strategy for Monday, Jan. 29

In the very short time-frame the sell-off in the last two days has created a slight oversold condition. Today it could continue bouncing up a little. In the early trading, 1426.25 is the key level. If the ES holds this price and breaks out of the 1430.75 level, upside momentum could push to 1435. 

If ES breaks down from 1422.00 — Friday’s low — it is possible to see 1417.75.   

Watch for a breakout of the first hour’s range. Trade in the direction of the breakout.

6. Intraday swing position entry

short side: 1432.75 (agg.scalping) 1436.25-37.50 (agg) and 1440.25(cons)

long side: 1417.75 (agg.scalping) 1414.25-1412 (agg) and 1408.25 (cons)

7. Results last week

What does this mean? See this explanation.

To see the trading plan for Tuesday, contact admin@naturus.com